Lawyer and founder Tracey Mylecharane on the legal shortcuts that cost small businesses the most, and how to fix them.
Seven years ago, I founded my legal business centred on the idea that prevention is better than cure, with an ethos of education and empowerment. I wanted to support business owners to set themselves up for success right from the start.
I’d spent more than a decade in courtrooms and mediations earlier in my career, watching disputes unfold and seeing firsthand the destruction that followed poor decision-making and inadequate contracts. I knew what legal problems looked like from the inside. And I knew what it took to avoid them.
Seven years in, I’m seeing a pattern in the businesses I work with. Not in careless businesses. Not in businesses run by people who don’t care. In smart, capable, well-run businesses, led by people who are excellent at what they do and deeply committed to doing it well.
But these are the legal mistakes I still see smart business founders make.
1: Using informal agreements
The most common thing I hear when a client comes to me after something has gone wrong is some version of: “We had an understanding.”
An understanding is not a contract. It is a shared assumption, and shared assumptions have a way of quietly shifting over time, particularly when money or expectations are involved.
I am not suggesting you approach every business relationship with suspicion. I am suggesting that clarity is an act of respect and professionalism. For your client, for your collaborator, and for yourself. Have it properly documented. Every time.
Informal contracts or agreements are an act of optimism, not professionalism. And they leave a business exposed every time.
2: Taking shortcuts with contracts
This one costs the most, in the most avoidable ways.
The contract or agreement you drafted, downloaded from Google, or had ChatGPT prepare when you started your business was designed for that version of your business. You did the best you could at the time.
But your agreement wasn’t properly tailored by a lawyer, and it wasn’t designed for the business you’re running now – the one with a team, with higher-value clients, with proprietary systems and a brand that carries real commercial weight.
Contracts are not administrative tasks and they’re not set and forget. They’re an asset of your business, and they’re living documents that should reflect how your business actually operates. Start with a strong foundation and they’ll grow and evolve with your business. Take shortcuts and they won’t.
3: Using being nice as a legal strategy
I say this with enormous warmth because I understand it completely.
Many of the women I work with have built their businesses on relationships, on warmth, on generosity, on going above and beyond. Those are genuine strengths. But they become vulnerabilities when they translate into avoiding difficult conversations, absorbing scope creep without addressing it, or letting an overdue invoice slide because the relationship feels more important than the money.
The irony is that clear boundaries and good legal documents don’t damage relationships. They protect them. Because they remove the ambiguity that causes damage in the first place.
4: Not treating intellectual property as an asset
I see this constantly in my clients’ businesses. Names and taglines with no trade mark protection. Course content sits unprotected while the business grows around it. Contractor agreements with no intellectual property assignment clauses, meaning the work created for the business may not legally belong to it.
Your intellectual property is often the most valuable thing your business owns. It deserves a proper protection strategy. It is not an afterthought.
5: AVOIDING DIFFICULT CONVERSATIONS
The conversations you avoid cost you.
There is always a conversation. The client whose expectations have shifted. The contractor arrangement that has become ambiguous. The service that has evolved but hasn’t been reflected anywhere. The boundary that needed to be drawn six months ago.
In my litigation years, I watched many disputes that could have been resolved with one honest conversation, had it happened earlier. By the time they reached me, the relationship was gone and the legal costs were significant.
The conversation you’re avoiding doesn’t go away. It accumulates interest.
6: Outsourcing legal literacy
I’m a lawyer. My job is to support you, advise you, and draft documents that protect you. It is not to be the only person in your business who understands what those documents say.
One of the most important things I firmly believe, both in running my own business and in working with clients, is that every business owner needs a baseline understanding of their own legal position. Not a law degree. Not technical expertise. But enough to ask the right questions, to recognise when something doesn’t feel right, and to know when to call.
Legal literacy is a business skill. It belongs alongside financial literacy, and it deserves the same investment.
7: Deferring the legal work until something goes wrong
This is the pattern that underlies every mistake on this list, and the one I am most committed to changing.
The cost of a properly drafted contract, a trade mark registration, an employment agreement reviewed before someone is hired, is a fraction of the cost of sorting out the mess when those things are missing. Not just financially. In time, in energy, in the toll that legal uncertainty takes on a business owner who is trying to do everything else at once.
More than twenty years in legal practice has given me enormous empathy for the decisions that get deferred, the things that feel less urgent than everything else on the list. But deferral is not neutral. Every month you operate without the right foundations in place is a month you are carrying risk you may not even be aware of.
The legal foundations of your business are not optional infrastructure. They are what hold everything else up. And the best time to take care of them is before you need them.
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